A Trump administration official told Breitbart News that Chinese officials have now threatened to detain Panamanian-flagged vessels in China, something that could disrupt global commerce and represents retaliation against Panama for recent developments taking control of the two ports on either end of the Panama Canal out of the hands of a Hong Kong company controlled by the Chinese Communist Party (CCP).
The threat, which was relayed to the Panamanian consulate in Greece by a major Greek shipping company and reported back to the American government before this official told Breitbart News of it, represents a significant escalation by the Chinese government after the Chinese lost their foothold in the Panama Canal, one of the world’s most important waterways that links the Atlantic and Pacific oceans.
As of now, there are no reports of any ships being detained just yet — but the threat just went out and could affect matters in future stops by Panamanian-flagged vessels at Chinese ports in the coming days or weeks.
Thousands of ships worldwide fly Panamanian flags under the Central American country’s flag of convenience program — Greek, Japanese, and Indian shipping companies are some of the biggest in the world that do so — so Chinese threats to detain such ships could slow or hinder trade worldwide. By “detain,” that does not necessarily mean these ships or their cargo are being seized by the Chinese, but that the Chinese government is slowing their departures to stop them and check them.
“An email was made to the consulate from a company — a major shipping line — sent this to the consulate, Panama’s consulate in Greece,” the Trump administration official told Breitbart News in a phone call on Wednesday evening. The official described the email in question as stating that China’s Maritime Safety Administration, or MSA, had “advised that ships with Panamanian flags will be detained at Chinese ports due to political reasons.”
“So, essentially, you have China retaliating on Panama due to the situation that they lost in the court proceedings — CK Hutchison lost in the court proceedings in the two ports they had in Balboa and Cristobal, which are the two largest ports, one on each end of the canal,” the Trump administration official told Breitbart News. “For a long time, China said that CK Hutchison was an independent company, but clearly that’s not the case. They’re essentially showing their hand and I think there have been more articles coming out, but this is a new development that just happened today — well, it happened yesterday on European time but it was reported to us today — where they are saying that Panamanian-flagged vessels would be stopped and would be checked, and it was due to political reasons which obviously is the situation involving the ports.”
The background here is that CK Hutchison, the Hong Kong-based company that operated the ports on either end of the Panama Canal, lost control of their contracts after court proceedings in Panama celebrated by the Trump administration. Two other companies have stepped in to run them for the time being while competitive bids take place over the next year for the long-term management of them. Those two companies are Maersk’s APM Terminals and Mediterranean Shipping Company’s Terminal Investment.
Concurrently with this news of China threatening to detain Panamanian-flagged vessels, China’s government “summoned” executives from Maersk and MSC, according to a report from the South China Morning Post (SCMP).
“China’s Ministry of Transport has summoned two maritime giants — Maersk and Mediterranean Shipping Company (MSC) — for talks on ‘international shipping operations’ amid legal disputes over the Panama Canal, a vital artery for global trade,” SCMP reported on Tuesday. “No further details were provided in the one-sentence statement, which was posted on the ministry’s website on Tuesday. But in China, government summons often serve as a warning and, if ignored, could lead to further action.”
The SCMP story later explains the background of the significance of these two particular companies getting “summoned” to Beijing.
“In late February, Panamanian authorities handed temporary control of two ports — previously run by CK Hutchison’s Panama Ports Company (PPC) — to Maersk’s APM Terminals and MSC’s Terminal Investment, respectively,” SCMP reported. “The decision followed a court ruling that voided CK Hutchison’s long-term port concession, granted in the 1990s, as ‘unconstitutional’. CK Hutchison, the Hong Kong-based conglomerate, has launched legal proceedings against the Panamanian government over the seizure of the two ports — Balboa and Cristobal — calling the takeovers ‘illegal’, according to a statement issued on Friday.”
China has been threatening executives of both companies — MSC and Maersk — that they needed to leave these Panamanian ports by last week or face adverse action. Now, that has not happened, and the summonses have gone out, and now this latest development is the threat to detain Panamanian-flagged ships in Chinese ports.
The Trump administration official added that the U.S. will stand with Panama as this issue progresses. “Panama is a close partner,” the official told Breitbart News. “They have worked very collaboratively with President Trump’s administration. So this worries us and we are definitely monitoring the situation and we are looking for different ways to support Panama throughout this challenge. I think a big part of it is exposing China. Up until now, they [the Chinese] have had this invisible hand in the back doing all of this and nobody is talking about this. Again, this is what China does. They go into countries, and they try to go against the rule of law. The rule of law here in this case, the Supreme Court of Panama, said that these concessions to CK Hutchison were illegal.”
